Lawmakers are not finished with the Employment Security Department yet

May 3, 2021

As the Washington Policy Center has highlighted over the last year, the Employment Security Department (ESD) has been unable to correct the fundamental issues plaguing the department. While some improvements have been made, claimants are still seeing long wait times, adjudication delays and delayed payments.

Interim Deputy Commissioner Phil Castle, who took over leadership of ESD from Commissioner Suzi Levine earlier this year, apologized in a hearing last week to legislators, who are frustrated with the departments lack of progress.

Last spring, ESD systems were overwhelmed with a significant increase in benefit claims, which allowed Nigerian scammers and other individuals to take advantage of an inadequate benefit claimant identity verification process and steal at least $650 million in benefits from the public.

Legitimate claimants were unable to contact ESD staff, or experienced long delays, when requesting new and managing existing unemployment claims due to phone and email systems being unable to handle increased volumes. In some cases, eligible Washington residents did not receive benefits for several months, while foreign nationals were able to steal money from the system quickly and easily.

The lack of system preparedness is particularly troublesome, as the Pacific Northwest is an active earthquake zone and is expected to suffer a significant seismic event in the future which would generate a massive increase in unemployment. ESD should have been prepared for this type of event.

As King 5 recently reported, ESD spokesperson Nick Demerice response to ESD’s lack of preparedness “Like every other phone-based company in the world, Monday morning at 8 a.m. is the worst possible time to try and call us.” Senator Ann Rivers (R – Clark County) rebuked Demerice, “If your high-volume is Monday morning, staff up for Monday morning,” Rivers said.

The legislature has recently passed 4 bills that are heading to the Governor’s desk for signature that address some of the issues the Employment Security Department (ESD) has struggled with in the last 12 months.

ESD has struggled with significant issues with slow processing times, adjudication backlogs, fraudulent claims and over payment problems that have plagued the troubled agency since before the pandemic began. During an state audit on October 20th State Auditor Pat McCarthy described her agencies problems dealing with ESD and described the ESDs response to auditors request in an interview as unlike anything she’s encountered at any other state agency since she took office in 2017.

The Washington Policy Center has released a detailed Policy Brief summarizing the problems with ESD and solutions for those problems. Some of these problems have been addressed by legislative action this year, but there is significant reform that is still needed.

ESD officials need to provide the public with more transparency into its internal policies, improve fund balance reporting accuracy, data timeliness and data availability. ESD needs to provide improved authentication and fraud protections against scams and individual fraudulent claims and needs reform to employer taxation policy and trust fund use.

In addition to ESD completing the current audits, continued, regular bicameral legislative oversight of ESD is required.

For all of the Washington Policy Center recommendations, read the full Policy Brief here.